Now Everybody's Got a Plan to Balance the Budget

The New York Times designed and released a nifty little interactive tool
a few days ago. It allows readers to choose which spending cuts and tax
increases they'd enact in order to balance the U.S. budget by 2015 and
2030. Just about every blogger has tried it, coming away with their own solutions to the vexing political problem. So what do most people end up cutting, and what do
they keep? More to the point, what does the tool actually show about
the feasibility of balancing the budget?

What You Cut Reuters's James Pethokoukis
manages to balance the budget entirely through spending cuts, cutting
defense spending, federal workforce, raising the retirement age, etc.
Law student David Schraub
went for roughly equal parts spending cuts and tax increases as far as
the 2015 budget went. "Most of the spending reductions came from the
defense department ... Other cuts included slashing farm subsidies and
reducing social security benefits for high earners." Sean Paul Kelley is one of several to opt first for halving foreign aid. meanwhile Ace
of Ace of Spades HQ breaks with some fellow conservatives in admitting
he has "never been on the bandwagon about reducing estate taxes to
zero," and would probably keep that tax as is.

What It Shows: Balancing the Budget Is EasyJames Pethokoukis boasts of solving the problem in under a minute while others take five, thirty, or more. The point, though, as one of Glenn Reynolds' commenters argues, is that one really can eliminate the deficit on paper fairly easily. So why can't politicians manage it?

What
It Shows: It's Easy If You Have No Constituents "Any politician who
tried to enact my plan would be carried away by villagers waving
pitchforks long before he'd finished reading off the list of tax
increases and budget cuts," writes The Atlantic's Megan McArdle. "Obviously, I selected some taxes that will never see the light of day in this county," admits Michael Tomasky, similarly. Summarizes Alex Massie from the British Spectator: "yes, balancing the budget is easy. Provided you never need to run for election yourself."

Is America Just Too Big? The reason the budget can't actually be balanced this easily, Alex Massie continues, is that "in a continent-sized country of 300 million people, every
interest is a powerful interest. We may agree that farm subsidies are a
noxious boondoggle but it's hardly surprising that farm states quite
like them and are determined to keep them." So what to do?

No wonder it finds it difficult
to move or, once underway, to change direction. I don't really see how
it can be any other way. Not when you try and govern 300m people in a
quasi-modern democracy. A new agenda of competitive federalism might be
the best bet (conveniently it also accords with my own philosophical
prejudices!) but getting from here to there will be difficult, not
least because there's precious little evidence that either party has
the wisdom to agree with me.

The Importance of Medicare
Costs The biggest option in this game for saving money is a box that
says "cap Medicare growth starting in 2013"--you get $562 billion just
with this "easy and fanciful trick," as Reuters's Felix Salmon calls it. "But it is
fanciful," he continues: "there's simply no credible way to enact that
kind of hard cap on Medicare expenditures, in a world where the over-65
population is growing fast as the Baby Boomers retire, where that
generation is also living longer than ever, and where end-of-life
healthcare is becoming increasingly expensive across the board."

And Medicare Structure All these budget-balancing devices, adds Think Progress's Matthew Yglesias,
"merely forestalls the arrival of budgetary doom"--they don't fix the
big problem, which is Medicare. "The programs are designed to give
senior citizens all the health care that they need and and 'health
care' constitutes a moving target whose price keeps going up," he
explains. "The only things that really cope with that are some form of
cost-effectiveness rationing, some form of price controls (which would
make more things cost effective), or else just covering fewer people."

A
Look at a Different Budget-Balancing Tool Lots of the blogger
reviewers of the New York Times tool point out that there are others
offered by other institutions. Ezra Klein is rather fond of "an older one
[which] ... doesn't give you any viable choices. Instead it allows you
to plug in the per-capita health-care spending of other countries and
then see what happens to our deficit." Here's the thing, he says: "If
we spent what high-performing, fully universal systems like France and
Germany spend, we'd have no budget deficit."

News reports are focusing on the Germanwings pilot's possible depression, following a familiar script in the wake of mass killings. But the evidence shows violence is extremely rare among the mentally ill.